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Winn-Dixie converts to SaveRite

Winn-Dixie is keeping a lid on its SaveRite store conversion plans. But at least in the Atlanta market, nearly all 40 Winn-Dixies have been converted to SaveRite warehouse stores since the end of last year.

Until the test proved successful, Winn-Dixie did not announce the number of store conversions. “We didn't know the number in the beginning,” says Joanne Gage, spokeswoman with the Jacksonville, Fla.-based company.

While Winn-Dixie is keeping mum on its corporate-wide conversion plans, the company completed its Atlanta conversion of 38 stores to the SaveRite format in April. The chain also controls seven leases on closed stores and is contemplating changeovers where they make sense. “That's pretty much our whole store base,” says Gage. “The test was very successful.”

Winn-Dixie had been stagnating in the Atlanta market for the past decade, which is why the chain began looking at the warehouse format there. Consumers have been looking to stretch their food dollars, even as the recession recedes. Conversion may also be a way to stave off losing any more customers to Wal-Mart, the low price leader in the grocery industry.

The conversions are a bold move, says analyst Charles Lemos, with Deutsche Banc Alex. Brown in San Francisco.

“Winn-Dixie is under pressure,” Lemos says. In the quarter ended April 3, Winn-Dixie reported its conversions are helping to lift sales. However, Winn-Dixie announced in early May it will exit the Texas and Oklahoma markets, bailing out of 76 stores. The company blamed continued losses and a reduction of market share.

In the Atlanta market, Winn-Dixie used to be No. 3, but the grocer has lost market share to rivals Kroger and Publix.

Winn-Dixie has owned the SaveRite name for years. A recent purchase of Jitney-Jingle stores, which included warehouse stores, may have prompted a new look at the format. Beyond the 38 in Atlanta, there are another 13 SaveRites in Mississippi and Florida.

Beyond Atlanta, little else is known about the roll-out of SaveRite. The chain operates existing SaveRite stores in Mississippi and Florida.

Gage says if a store is unprofitable, the chain is taking action, much as it did in Texas and Oklahoma.

“No definite plans have been announced,” Gage says. “But where we've done it, it has been successful and we will continue to evaluate various sites.”

Renée DeGross covers retail business and development for The Atlanta Journal-Constitution.

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